MOSL: Morning India (8/January/20): 1. India Strategy 3QFY20 Preview (Earnings still tepid; Financials to drive aggregates); 2. EcoScope; 3. Tata Chemicals
MOrning India (8/January/20): 1. India Strategy 3QFY20 Preview (Earnings still tepid; Financials to drive aggregates); 2. EcoScope; 3. Tata Chemicals
Today’s top research theme
India Strategy 3QFY20 Preview: Earnings still tepid; Financials to drive aggregates
- The third-quarter earnings-report season will be more of the same with Financials driving the quarter and Commodities dragging it. Corporate commentary on the underlying demand scenario and any sequential improvement post government announcements will be the key monitorables.
- We estimate MOFSL Universe's PBT/PAT to increase by 1%/9% YoY, led by BFSI (estimated to contribute 81% of incremental profit YoY), Automobile (low base effect) and Consumer (beneficiary of tax cuts). However, Metals and O&G are likely to drag the performance, given the underlying weak commodity prices. Telecom is expected to sharply reduce losses YoY, which will support earnings. Ex-BFSI, MOFSL Universe's PBT is estimated to decline by 5% and PAT to increase by 2% YoY. We estimate Nifty PBT/PAT to increase 2%/8% YoY. Ex-BFSI, we expect Nifty PBT/PAT to decline 6%/2% YoY.
- Our FY20 Nifty EPS estimate has been stable at INR532. We now build in EPS growth of 10% for FY20.
Piping hot news
Iran launches large attack on US-led forces in Iraq, Pentagon says
Iran has launched a major ballistic missile attack on U.S.-led forces in Iraq, the U.S. military said on Tuesday, potentially triggering a new round of escalation in the confrontation between the United States and Tehran. The U.S. military said an assessment was underway to determine damage and any casualties at al-Asad airbase in Iraq, which hosted President Donald Trump in December of 2018, as well as at another facility in Erbil.
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